Chinese Wall

A 'Chinese Wall' separates two departments within an investment bank to ensure that conflicts of interest do not arise. London Stock Exchange Glossary

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Chinese wall Chi‧nese wall [ˌtʆaɪniːz ˈwɔːl ǁ -ˈwɒːl] noun [countable usually plural]

FINANCE in certain financial institutions, an action to stop secret information passing between departments where one department could gain from the information. For example, a department buying and selling shares might gain from information from the department that gives advice on merger S (= when one company joins with another to form one larger company):

• The securities commission fined the financial group for failing to maintain Chinese walls between its corporate finance and broking arms.

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   Rules designed to prevent price-sensitive information seeping between dealing, fund management and corporate finance operations within the same investment house. For example, it would not be considered appropriate, and in some countries it is illegal, for a corporate finance team to notify its own in-house share dealing department of an impending takeover bid.

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Chinese wall UK US noun [C] (also firewall)

► FINANCE a set of actions that a business, especially a financial institution, takes in order to prevent information that one department has from reaching another department that might illegally get an advantage from it: »

With Chinese walls, corporate advisers are kept separate from traders so price sensitive information is kept secret.